Brian Lenihan

A battle too far

Ireland’s former finance minister dies, at just 52

FOR most of the 2000s the job of Ireland's finance minister was fun: watch the revenues roll in, don't ask too many questions and spend enough to ensure re-election. For Brian Lenihan, who died of cancer on June 10th, it was impossibly hard. On his appointment in May 2008 he said that it was his misfortune to take on the job just as Ireland's property boom was ending. He could not have foreseen just how unfortunate.

Mr Lenihan will be remembered for one decision in particular. In September 2008 the collapse of Lehman Brothers prompted him to announce a blanket guarantee to creditors of Ireland's big lenders. In hindsight that was a huge mistake. The scale of the banks' bad debts overwhelmed the ability of the Irish state to meet its promise. Ireland's bail-out last November can be traced to that moment; a debate on imposing losses on bank bondholders still rages.

At the time, of course, things were less clear-cut. Few realised just how ropy the banks were. Protecting creditors is a well-worn way of muting financial panic, and for a while at least the guarantee did just that. Mr Lenihan's later decision to set up an asset-management agency to take on the banks' dud property loans was also taken from the textbooks. The problem was that the asset transfers forced the banks' losses into the open. The cheapest bail-out in the world, as he initially called it, turned into one of the costliest.

Mr Lenihan's Fianna Fail party paid a heavy price in elections earlier this year. He was the only member of his party to retain a seat in Dublin. Voters may have been responding to his tenacity, in grappling with the crisis and his own illness.